ASX flat after Wall Street treads water near record highs (2024)

The Australian sharemarket is relatively flat, following in the footsteps of Wall Street on Friday, which had a quiet finish to the week.

The S&P/ASX 200 Index was down 12.5 points, or 0.2 per cent, to 7711.8 at 1.15pm AEST, with shares in technology, energy and industrial companies leading the losses.

Tabcorp shares slid 0.8 per cent after the company appointed Gillon McLachlan, former boss of the Australian Football League, as its new chief executive.

McLachlan will act as an observer under chair Bruce Akhurst until he officially joins the business in August.

Embattled online retailer Booktopia has suspended trading in its shares after instigating a trading halt last week. The company said “outcomes from the strategic review, including the seeking of additional funding, have not progressed to the extent where it is capable of making an announcement”.

Loading

Capricorn Metals shares were among the best performers with a gain 4.6 per cent; Telix Pharmaceuticals is up 4.2 per cent and RED 5 has climbed 3.4 per cent.

Among the losers is Arcadium Lithium (down 6 per cent), Paladin Energy (down 5 per cent) and A2 Milk (Down 4.6 per cent).

The technology sector led the losses, with WiseTech Global shares down 3 per cent. Xero was down 1.2 per cent and NextDC down 1.6 per cent.

The healthcare, communication services and utilities sectors were slightly in the green, but not enough to offset most of the other sectors trading either flat or in the red.

The board of the Reserve Bank meets on Tuesday but no one is expecting it to make a move on interest rates, according to Judo Bank. However, it is expected that board members will discuss whether further tightening is needed.

“The governor said in recent weeks that the RBA would want to see two quarterly CPI results to confirm any shift in trend in inflation, ruling out a response to recent stronger-than-expected data, including the high April monthly CPI indicator,” wrote Judo Bank economists Warren Hogan and Matthew De Pasquale in a research note to clients.

“With few economists forecasting a hike, and markets not really pricing in any move over the months ahead, the RBA board should make it clear this week if they are getting closer to the point of hiking rates.”

On Friday, the S&P 500 Index slid by less than 0.1 per cent – the first time in the week it did not set a record. The Dow Jones Industrial Average lost the same amount while the technology heavy Nasdaq Composite Index added 0.1 per cent to another record high.

Losses were sharper across the Atlantic, where equity markets have been rocked by the results of recent elections in Europe. Wins by far-right parties have raised pressure on France’s president, in particular, and investors worry it could weaken the European Union, stall fiscal plans and hurt France’s ability to pay its debt.

France’s CAC 40 fell 2.7 per cent to bring its loss for the week to 6.2 per cent – its worst performance in more than two years. Germany’s DAX lost 1.4 per cent.

In New York, RH shared crashed 17.1 per cent after the company reported a worse loss for its latest quarter than financial analysts expected. The seller of home furnishings called this “the most challenging housing market in three decades.”

Loading

High mortgage rates have hurt the housing market, as the Federal Reserve has kept its key interest rate at the highest level in more than two decades. The central bank is slowing the economy through high rates in hopes of starving high inflation of its fuel.

US stocks have nevertheless set a string of records as hopes rise that inflation is slowing enough to convince the Fed to cut rates later this year. Big technology stocks continue to race ahead almost regardless of what the economy and interest rates are doing.

Adobe jumped 14.5 per cent after reporting stronger profit for the latest quarter than analysts expected. Broadcom rose 3.3 per cent for a second straight day of gains after reporting better profit than expected and a 10-for-one stock split to make its price more affordable. Market darling Nvidia gained 1.8 per cent to see its market value climb to $US3.25 trillion ($4.92 trillion). Nvidia was the strongest single force pushing up the S&P 500. Adobe and Broadcom were close behind.

In the bond market, US Treasury yields ticked lower after an economic report suggested sentiment among US consumers failed to improve this month.

With AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.